Undergraduates Face Growing Credit-card Debt

You've got the letter in the mail, the "free" sandwiches at subway, and all kinds of other advertisements shoved in your face for credit cards. With these aggressive marketing techniques, it's absolutely no surprise that St. Paul Pioneer Press is reporting that 43% of young people get their first taste of credit while in their freshmen year of college. Another 23% of students get their first credit card before even entering the realm of post-secondary education.

Three out of four college students now have credit cards, and the average balance on the cards are a shocking $1,585, reported Nellie Mae. This debt level increases every year, but what's the cause? Many uneducated students view the cards as free money, or slowly build the balance overtime without realizing it until they have $10,000 in credit card debt.

Some colleges are now taking steps to keep their students credit in check, by preventing credit card companies from trying to offer cards on campus and by education campaigns to teach students how to use their credit wisely and responsibly. One such program in Smith College, which is a small school in Northampton, Massachusetts, offers a series of personal finance workshops to ensure students use their credit appropriately. There are even high schools now offering personal finance courses to ensure students get on the right track. One such program, Financial Peace for the Next Generation, teaches students save, give and spend responsibly to pay cash for most everything.

Many universities offer no specific program to educate students about finance besides its normal set of business classes, however here are some tips to keep your credit in check. The first and most obvious piece of advice to avoid the nightmare of having a high credit card debt is to simply not get a credit card. Since most students with large credit card debt build it up slowly overtime with impulse purchases, by avoiding using credit cards for small impulse purchases will help prevent you from increasing the balance. If you pay your balance off at the end of the month, you won't have any problems. If you can't pay the balance off at the end of the month, at least make the minimum payment, otherwise the issuing credit card company can increase your interest rate to nearly 30%! Never sign up for a credit card to just get some free stuff, like the pizza and subway sandwiches that'll be gone in an hour anyway. You really only need one, if any credit cards.

Finally, always create a budget and stick to it. At the beginning of each month, list all your income and expenses for that month, and stick to it. Make your money work for you; don't just let it disappear from paycheck to paycheck!